Fitbit's new products accounted for 54% of Q2 revenue; sales surge

The company has been spending heavily to diversify its portfolio of colorful wristbands and clippable devices that track calories, sleeping patterns and heart rate, as well as enter new markets.Reuters | August 03, 2016, 12:22 IST

Fitbit Blaze

Wearable fitness device maker Fitbit's quarterly revenue raced past analysts' estimates as demand jumped for its new devices, sending its shares up as much as 8.1% in after-market trading.

The company has been spending heavily to diversify its portfolio of colorful wristbands and clippable devices that track calories, sleeping patterns and heart rate, as well as enter new markets.

Fitbit's new products, Blaze and Alta and related accessories, accounted for 54% of revenue in the second quarter, up from 50% in the preceding quarter, the company said on Tuesday.

About two-thirds of the total activation of Alta and Blaze were by new customers, while the rest were by those who own, or previously owned another Fitbit device, the company said.

The company said it sold 5.7 million devices in the second quarter ended July 2, its highest sales since the last holiday season. Fitbit sold 4.5 million devices in the second quarter of 2015.

Both Blaze, a smartwatch, and Alta, a wristband, were released in March. Fitbit's shares were up 6.2% at $13.98 in after-hours trading.

The company's executives also played down investor fears of rising competition during a post-earnings conference call, terming it a "misconception".

The reality is that most of these companies have not altered the competitive dynamics, Chief Executive James Park said.

The company's net income attributable to shareholders fell to $6.3 million, or 3 cents per share, from $7.1 million, or 7 cents per share, a year earlier. Fitbit's operating costs more than doubled to $235.3 million in the quarter.

Excluding items, the company reported a profit of 12 cents per share, edging past analysts' average estimate of 11 cents per share, according to Thomson Reuters I/B/E/S.

Up to Tuesday's close, the company's shares had fallen about 56% this year.